This Is Why It Is Important For you to Know Your Customer
One fundamental characteristic of successful businesses is that they know their customers. Actually they don’t just know their customers, they have based the success of their businesses squarely on their ability to understand everything about their customers. Before I delve into the meat of the matter I will give two critical examples of KYC (Know Your Customer) implementation in Nigeria.
The BVN was implemented to ensure banks ‘know their customers’. Knowing their customers means having a thorough knowledge of who does banking with them. They have such information as names, addresses, date of birth, email addresses and phone numbers. Of course, they also have the bio data, this is the whole point of the exercise. This ensures they are able to identify all account holders and that their account holders are not ghosts. Suffice to say this came about as a result of government policy.
The mobile phone companies were also mandated to register all SIMs (mobile phone numbers) on their networks and to deactivate the unidentified numbers. The registration will likely cover names, addresses, date of birth etc. The reason for this is also similar to that of the BVN – a government policy.
Now you get the point of KYC. Know everything about your customers. This is because data is required for business success. If you are a business owner, you need to have a KYC policy.
Why do you need to know your customers?
Of course, every business owner should seek to know their customers because it is just good practice. You don’t just want to sell your products without having that ‘personal interaction’ with your customers. This ensures you understand the habits and buying behaviour of your customers.
With a good KYC policy, you will be able to know what your customers buy the most and when. You are able to realistically predict buying patterns and trends. This will help you to sell more and even market new products to your customers.You can always sell more if you know more. You can’t know if you don’t find out, hence the need for a KYC policy as it will help you to know your customers’ demographics and be able to market your best sellers or new products to the right demographics.
Retail business is not strictly complete without credit sales. Of course, no one expects a credit sale from the likes of Shoprite but we have all experienced this as business owners. You will always have customers who want to ‘buy now and pay later’. How do you then manage your credit sales without having complete information about your customers? Knowing the regularity and amount of purchase will help you to decide whether or not to sell on credit.
Knowing your customers will also ensure you know the right level of support to provide them.
Businesses the world over already do this as they understand the importance of having as much customer data as possible. They know they can mine the data to achieve all of the above and many more.
How can you do this?
Simply, you have to invest in the right tool. As a business owner, you probably use a notebook as your sole tool for running your business and don’t have any system or tool for managing your customers. This may be working for you but there is absolutely no scope to scale. You are restricted to the amount of data mining and analysis you can carry out on your business. You need a number of tools to run your business efficiently. So to know your customers and be able to manage them easily and efficiently, you will also need a customer relationship tool.
Regardless of the state of our businesses, we should create adequate time for customer management. This begins with having the right tool to capture customer data and be able to easily predict what makes your customers tick. Without a doubt, you may have been able to run your business without the added cost of a new tool, but you stand at a massive advantage if you know your customers as you can easily up-sell products, provide customised support or service and finally be able to enjoy their continued loyalty and patronage.
Do you have a KYC policy? How are you able to manage your customers? Which tools do you use for this? You may also have questions? Do let me know in the comment section below.
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Written by Ade Olabode, previously posted on Bellanaija